Demonetisation completes 2 years: As India completes two years of demonetisation today, Finance Minister Arun Jaitley has once again come out in support of the exercise explaining how the noteban by the government helped in formalising the economy.

Arun Jaitley also said that the collection of both personal and corporate income tax increased as a result of demontisation. (Reuters)

Demonetisation completes 2 years: As India completes two years of demonetisation today, Finance Minister Arun Jaitley has once again come out in support of the exercise explaining how the noteban by the government helped in formalising the economy. Arun Jaitley said that demonetisation helped in tackling black money and expanding the tax base. “Demonitisation is a key step in a chain of important decisions taken by the Government to formalise the economy,” Arun Jaitley wrote in a blog.

Adding further Arun Jaitley said that demonetisation was basically aimed at ensuring that weaker sections become part of the formalised economy and moving towards digitisation. “Demonitisation compelled holders of cash to deposit the same in the banks. The enormity of cash deposited and identified with the owner resulted in suspected 17.42 lakh account holders from whom the response has been received online through non-invasive method,” he wrote. The launch of Unified Payment Interface (UPI) in 2016 helped immensely in digitisation of the economy, he added.

“The value of BHIM transactions has gone up from Rs. 0.02 billion in September, 2016 to Rs. 70.6 billion in September, 2018. The share of BHIM transactions in overall UPI transactions is at about 48% in June, 2017,” he also said.

Countering the demonetisation critics who claim that noteban exercise failed to arrest use of cash, he said that “confiscation of currency was not an objective of demonitisation. Getting it into the formal economy and making the holders pay tax was the broader objective,” he said.

Arun Jaitley also said that the collection of both personal and corporate income tax increased as a result of demontisation. “This formalisation of the economy has led to the tax payer base increase from 6.4 million in the pre-GST regime to 12 million tax payers in the post-GST regime,” he added.